The Added Economic and Environmental Value of Plug-in Electric Vehicles connected to Commercial Building Microgrids

Author:

Year:

2010

Abstract:

Connection of electric storage technologies to smartgrids or microgrids will have substantial implications for building energy systems. In addition to potentially supplying ancillary services directly to the traditional centralized grid (or macrogrid), local storage will enable demand response. As an economically attractive option, mobile storage devices such as plug-in electric vehicles (EVs) are in direct competition with conventional stationary sources and storage at the building. In general, it is assumed that they can improve the financial as well as environmental attractiveness of renewable and fossil based on-site generation (e.g. PV, fuel cells, or microturbines operating with or without combined heat and power). Also, mobile storage can directly contribute to tariff driven demand response in commercial buildings. In order to examine the impact of mobile storage on building energy costs and carbon dioxide (CO2) emissions, a microgrid/distributed-energy-resources (DER) adoption problem is formulated as a mixed-integer linear program with minimization of annual building energy costs applying CO2 taxes/CO2 pricing schemes. The problem is solved for a representative office building in the San Francisco Bay Area in 2020. By using employees’ EVs for energy management, the office building can arbitrage its costs. But since the car battery lifetime is reduced, a business model that also reimburses car owners for the degradation will be required. In general, the link between a microgrid and an electric vehicle can create a win-win situation, wherein the microgrid can reduce utility costs by load shifting while the electric vehicle owner receives revenue that partially offsets his/her expensive mobile storage investment. For the California office building with EVs connected under a business model that distributes benefits, it is found that the economic impact is very limited relative to the costs of mobile storage for the site analyzed, i.e. cost reductions from electric vehicle connections are modest. Nonetheless, this example shows that some economic benefit is created because of avoided demand charges and on-peak energy. The strategy adopted by the office building is to avoid these high on-peak costs by using energy from the mobile storage in the business hours. CO2 emission reduction strategy results indicate that EVs’ contribution at the selected office building are minor.

This information was submitted by Michael Stadler, CEO, Center for Energy and innovative Technologies on 11/16/10.